Free Software From Anywhere?

Sun moves closer to a world not dependent on Microsoft

For years, Sun Microsystems Inc. Chief ExecUtive Scott G. McNealy has been one of high tech's most vocal rebels against the digital world order set by software kingMicrosoft Corp. He has championed a vision in which computer users would no longer be tied to PCs crammed with Microsoft software. Rather, they could tap into computing resources--including all their E-mail and favorite programs--whenever they wanted, as long as they could make a connection to the Internet.

It was bold talk. And until now, it was just talk. But in the past year, Sun has been developing and acquiring technology that, when combined with its back-office coMputers, makes the notion of a world of computing beyond Microsoft far more credible. On Aug. 31, McNealy filled a key gap in the strategy: Sun announced the purchase of Fremont (CaLif.)-based Star Division, which has office programs that can run on Windows, Linux, Sun's Solaris, and other software.

What's the big deal? By early next year, Sun will convert Star's suite, which includes a spreadsheet and word processor that are compatible with the Excel and Word programs that are the mainstays of Microsoft's market-dominating Office suite, into a Web-based product called StarPortal. A Net company like Yahoo! Inc. could include a word-processing applet on its site, so customers could create, store, and distribute memos from wherever they log on. "Software is going to be delivered as a service," says Gary L. Steele, CEO of Portera Systems Inc., an E-commerce company that plans to offer Star's software.

OFFICE THREAT? And Sun's price is right for cyber execs like Steele. Sun plans to give the Star programs to companies that agree to freely dispense the programs to customers across the Net. If it works, computer users would be able to access their files from whatever machine they log on from--say, a terminal in a hotel room or an airport kiosk. Even better, users wouldn't have to install new software to add new features. Instead, any time they fired up the software from the Net, they would automatically get the latest version.

McNealy says he isn't out to kill Office, which has more than 95% of the office productivity software market. But Sun thinks it can start to move customers away from pricey shrink-wrapped software that is continually made obsolete by upgrades. Big corporations that have millions invested in Windows applications are unlikely to switch, McNealy admits. "The enterprise is the last place this will happen," he says. "It will Start in schools and small businesses."

Still, the odds of changing the software status quo are far better than they were four years ago, when Sun, among others, put forth the idea of network computers. Those stripped-down desktop machines were designed to get programming from the Net, but a lack of software and plunging PC prices limited the market for such an alternative. Now, the Online Revolution is in full swing, and millions of computer users already routinely turn to the Net for programming, such as Juno Online Services Inc.'s E-mail system or Yahoo!'s free calendar program. So getTing full-blown productivity software off of the Net isn't such a stretch.

FREE COMPUTERS. Meanwhile, a new class of Internet software company has sprouted up to help push this "apps on tap" approach. Companies ranging from start-ups like Corio Inc. and Digex Inc. to giants like AT&T and U S West have set up shop as so-called application service providers. Their role: to provide programs and service over the Net. SAP, Siebel Systems, and IBM's Lotus division have teamed up with these ASP's, and a bevy of newcomers are creating new apps on tap. Forrester Research Inc. believes the ASP industry will vault to $21 billion by 2001.

Hewlett-Packard, anxious to break Sun's lock on the Internet market, is even giving its computers away for free to ASPs that are willing to share a percentage of their future revenues.

Once Star's software is made more Net-friendly early next year, users will be able to tap these programs from Palm Pilots and other handheld devices. Sun is expected to unveil a stripped-down "thin-client" computer to serve this market. And even Microsoft loyalists like HP are following suit. "We see the thin-client market growing to at least six million units in the next three years," says Wolfgang Baltes, general manager of HP's thin-client operation.

Before the Sun vision of software-on-demand comes into focus, lots more programmers will have to follow Star's lead. And the Net itself needs some upgrading: It's still not nearly as reliable a place to find your precious program as the C: drive. And consumers who depend upon dial-up modems won't like waiting for software for such simple jobs as printing out a memo.

But Sun's purchase of Star is a small but potentially important step, since it provides a slate of commonly used programs similar to what most people use now. Through its alliance with Netscape Communications, now a unit of America Online Inc., Sun also has a range of back-office E-commerce software that ASPs would use to deliver apps on tap. And its purchase of Forte Software gives it development tools that ASPs would use. It just might add up to a formidable challenge to the old order.

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